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Health Insurance Innovations says short-term insurance rule a tailwind in '18

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Health Insurance Innovations says short-term insurance rule a tailwind in '18

Health Insurance Innovations Inc. executives heaped praise on a federal regulator's proposed rule to expand the amount of time short-term health plans can cover a patient during the company's fourth-quarter 2017 earnings call.

Under an October 2017 executive order from President Donald Trump, the Department of Health and Human Services proposed a rule to allow the sale of so-called short-term, limited duration health plans lasting up to 12 months in an effort to give consumers more health insurance choices.

The plans do not provide the full benefits required under the Affordable Care Act, instead offering consumers short-term health insurance coverage if they need it.

The company came under fire from state regulators in September 2017 for marketing the plans as ACA-compliant. President and CEO Gavin Southwell said on the call that since regulators opened an investigation into the matter, the company has yet to hear back.

Southwell called the proposed rule from HHS a tailwind for the company going into 2018. He stressed that the company's short-term plans are a viable alternative against the backdrop of rising premiums for ACA-compliant plans.

Coupled with a repeal of the health law's individual mandate penalty, the plans the company offers will be even more competitive as consumers look outside the health insurance exchanges for other coverage options, Southwell said.

"Short-term medical plans and health benefit plans are not the same as ACA plans and are not suitable for everyone," Southwell noted. "They do, however, provide consumer choice and provide a valuable safety net for consumers who do not qualify for Medicaid or a subsidy for ACA plans."

Shares of the company shot up almost 9% during early trading March 1, the trading session after the company reported earnings.